NEPC’s Colin Hatton was recently quoted in this PitchBook article discussing the growing reliance on philanthropy to offset structural financial pressures, even for the most well-resourced institutions. Read the PitchBook article here.
During one of Harvard University’s most challenging years, donors helped fund the endowment, which in turn supported the university’s operations.
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“A lot of educational institutions are struggling with balancing their operating budgets, and you’re seeing a number that are running deficits. In some cases, they’re using the endowment to help bridge that deficit,” said Colin Hatton, a principal at NEPC, where he advises endowments and foundations.
Hatton said endowments’ mounting contributions to university operations, in addition to rising inflation expectations, has many of his clients planning to increase their returns in the coming year. NEPC, he said, recommends funds do this through strategic asset allocation decisions, particularly by prioritizing an equity-centric portfolio, allocations to private markets and fixed income exposure, including private debt.